APPENDIX 4D FOR THE PERIOD ENDED 31 DECEMBER 2017 Report for the period 9 June 2017 to 31 December 2017 The report is for the reporting period from date of incorporation to 31 December 2017. This is the first reporting period for the Company. Results for announcement to the market 31 December 2017 $ Revenue from ordinary activities 23,566,800 Profit before tax for the period 19,671,136 Profit from ordinary activities after tax attributable to members 13,769,795 Dividends There were no dividends paid or proposed during the period Net tangible assets per share Pre tax 2.02 Post tax excluding deferred tax liabilities/deferred tax assets on unrealised gains/losses 2.02 Post tax including deferred tax liabilities/deferred tax assets on unrealised gains/losses 2.01 $ This report is based on the period ended 31 December 2017 interim report which has been subject to an independent review by the Auditors, Pitcher Partners. All the documents comprise the information required by Listing Rule 4.2A.
Interim Financial Report For the period from 9 June 2017 to 31 December 2017
CONTENTS Corporate Directory 1 Directors Report 2 Auditor s Independence Declaration 4 Statement of Profit or Loss and Other Comprehensive Income 5 Statement of Financial Position 6 Statement of Changes in Equity 7 Statement of Cash Flows 8 Notes to the Financial Statements 9 Directors Declaration 12 Independent Auditor s review Report to the Shareholders 13
Directors Secretary CORPORATE DIRECTORY David Jones Robert Luciano Douglas Tynan Jaye Gardner Noel Whittaker Lawrence Myers Ursula Kay Investor Relations Manager Investment Manager Registered Office Prime Brokers and Custodians of the Company Victoria Arthur Telephone: (02) 9237 8921 VGI Partners Pty Limited ABN 33 129 188 450 39 Phillip Street Sydney, NSW 2000, Australia Deutsche Bank AG Winchester House, 1 Great Winchester Street London, EC2N 2DB, United Kingdom Morgan Stanley & Co. LLC 1585 Broadway, 6 th Floor New York, NY 10036, United States of America Auditor Lawyers Share Registrar Stock Exchange Pitcher Partners Level 22, MLC Centre 19 Martin Place Sydney, NSW 2000, Australia Telephone: (02) 9221 2099 Kardos Scanlan Pty Limited Level 5, 151 Castlereagh Street Sydney, NSW 2000, Australia Telephone: (02) 9176 5290 Boardroom Pty Limited Level 7, 225 George Street Sydney, NSW 2000, Australia Telephone: (02) 9290 9600 Australian Securities Exchange (ASX) The home exchange is Sydney, Australia ASX code: (VG1) 1
DIRECTORS REPORT TO SHAREHOLDERS FOR THE PERIOD ENDED 31 DECEMBER 2017 Directors Report The Directors of (the Company) present their report together with the condensed interim financial report for the period 9 June 2017, being the date of incorporation, to 31 December 2017. is a company limited by shares and is incorporated in Australia. Directors The names of the Directors in office at any time during or since the end of the period are as follows: David Jones Non-Independent Chairman Robert Luciano Non-Independent Director Douglas Tynan Non-Independent Director Jaye Gardner Independent Director Noel Whittaker Independent Director Lawrence Myers Independent Director Principal Activity The principal activity of the Company is investing in global listed securities. The Company may take short positions and may also deal in derivatives for hedging purposes. There have been no significant changes in the nature of these activities during the period. Review of Operations The company was incorporated on 9 June 2017 and listed on the ASX on 28 September 2017. During the period under review, the Company raised capital of $550,000,002 by issuing 275,000,001 shares at a price of $2.00 per share. From the date of share allotment, being 25 September 2017, to 31 December 2017, VGI Partners Global Investments Limited s portfolio generated a net return of +1.0% after all fees. Investment operations over the period ended 31 December 2017 resulted in an operating profit before tax of $19,671,136 and an operating profit after tax of $13,769,795. The Investment Manager has been patiently and steadily deploying the capital such that as at 31 December 2017, the portfolio was approximately 45% of targeted individual stock weightings. Given the Investment Manager s focus on preservation of investors capital, the Manager may take several more months to fully deploy the portfolio, depending on market conditions. Financial Position The net asset value of the Company as at 31 December 2017 was $553,757,740. Dividends The Directors have not declared a dividend for the reporting period ending 31 December 2017. 2
Rounding of Amounts to Nearest Dollar In accordance with ASIC Corporations (Rounding in Directors Reports) Instrument 2016/191, the amounts in the Directors Report have been rounded to the nearest dollar. Auditor s Independence Declaration A copy of the Auditor s independence declaration as required under section 307C of the Corporations Act 2001 in relation to the review for this period is set out on page 4 of this Financial Report. This report is made in accordance with a resolution of the Board of Directors. David Jones Chairman Sydney 29 January 2018 3
Auditor s Independence Declaration To The Directors of In relation to the independent auditor s review for the period ended 31 December 2017, to the best of my knowledge and belief there have been: (i) no contraventions of the auditor independence requirements of the Corporations Act 2001; and (ii) no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of during the period. SCOTT WHIDDETT Partner PITCHER PARTNERS Sydney 29 January 2018 An independent New South Wales Partnership. ABN 17 795 780 962. Level 22 MLC Centre, 19 Martin Place, Sydney NSW 2000 Liability limited by a scheme approved under Professional Standards Legislation 4 Pitcher Partners is an association of independent firms Melbourne Sydney Perth Adelaide Brisbane Newcastle An independent member of Baker Tilly International
STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD 9 JUNE TO 31 DECEMBER 2017 INCOME Net realised and unrealised gain/loss on investments Dividend income Interest income Receivable income Other income Total Income For the period 9 June 2017 to 31 December 2017 Notes $ 7,147,568 1,017,884 1,095,485 14,302,938 2,925 23,566,800 EXPENSES Performance fees Directors fees including on costs Finance costs Stock loan fees Dividends on shorts Directors insurance fees Receivable amortisation Other trade related expenses Withholding tax Total Expenses (986,563) (82,500) (191,127) (39,073) (73,400) (112,105) (2,256,953) (1,651) (152,292) (3,895,664) Profit before income tax 19,671,136 Income tax expense (5,901,341) Profit attributable to members of the Company 13,769,795 Other comprehensive income Other comprehensive income for the period, net of tax - Total comprehensive income for the period 13,769,795 Basic earnings per share 6 10.6 cents The accompanying notes form part of these financial statements 5
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 ASSETS 31 December 2017 Notes $ Cash and cash equivalents 404,406,268 Trade and other receivables 1,328,817 Financial assets (securities owned long) 5 197,812,542 Deferred tax assets 4,004,823 Receivable 12,045,985 Total Assets 619,598,435 LIABILITIES Trade and other payables (3,675,496) Financial liabilities (securities sold short) 5 (56,549,917) Current tax liabilities (596,973) Deferred tax liabilities (5,018,309) Total Liabilities (65,840,695) NET ASSETS 553,757,740 EQUITY Issued capital 3 550,000,002 Capitalised costs of the offer (10,012,057) Retained earnings 4 (b) 13,769,795 TOTAL EQUITY 553,757,740 The accompanying notes form part of these financial statements 6
STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD 9 JUNE TO 31 DECEMBER 2017 Retained Issued capital earnings Total Equity $ $ $ Initial subscription upon incorporation 2-2 Shares issued under IPO 550,000,000-550,000,000 Capitalised costs of the offer (10,012,057) - (10,012,057) Profit for the period - 13,769,795 13,769,795 Balance at 31 December 2017 539,987,945 13,769,795 553,757,740 The accompanying notes form part of these financial statements 7
STATEMENT OF CASH FLOW FOR THE PERIOD 9 JUNE TO 31 DECEMBER 2017 CASH FLOWS FROM OPERATING ACTIVITIES For the period 9 June 2017 to 31 December 2017 $ Proceeds from the sale of investments 70,426,507 Payments for the purchase of investments (205,959,503) Dividends received 263,820 Interest received 679,887 Other income received 1,338 Stock loan fees paid (20,699) Dividends on shorts (63,437) GST paid (2,543) Directors insurance fees paid (112,105) Director fees paid (82,500) NET CASH USED IN OPERATING ACTIVITIES (134,869,235) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from shares issued 550,000,002 Costs of the offer (14,302,938) NET CASH PROVIDED BY FINANCING ACTIVITIES 535,697,064 Net Increase in Cash and Cash Equivalents Held 400,827,829 Effects of exchange rate changes on cash balances of cash held in foreign currencies 3,578,439 Cash and Cash Equivalents as at the Beginning of the Period - CASH AND CASH EQUIVALENTS AS AT END OF THE PERIOD 404,406,268 The accompanying notes form part of these financial statements 8
Notes to the Financial Statements 1. Statement of Significant Accounting Policies The principal accounting policies adopted in the preparation of these condensed interim financial statements are set out below. The condensed interim financial statements were authorised for issue on 29 January 2018 by the Board of Directors. Basis of Preparation The condensed interim financial statements for 9 June 2017, being the date of incorporation, to 31 December 2017 have been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. This is the first reporting period for the Company. The report does not include full disclosures of the type normally included in an annual financial report. It is recommended that this interim Financial Report is to be read in conjunction with any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The interim financial statements have been prepared on an accrual basis, and are based on historical costs, except for the revaluation of certain non-current assets and financial instruments which are carried at their fair values. Cost is based on the fair values of the consideration given in exchange for assets. In accordance with ASIC Corporations (rounding in Financial Reports) instrument 2016/191, the amounts in the Financial Report have been rounded to the nearest dollar. (a) Accounting Policies There are no new and revised accounting requirements significantly affecting the period ended 31 December 2017 financial statements. The accounting policies have been consistently applied by the Company throughout the reporting period and can be referred to in the VGI Partners Global Investments Limited Prospectus. The Statement of Financial Position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and are not distinguished between current and non-current. 2. Dividends No dividends were declared during the period ended 31 December 2017. 3. Issued Capital Share Capital 31 December 2017 $ Ordinary Shares 550,000,002 9
4. Movements in Equity (a) Movement in Share Capital Number of Shares Initial subscription upon incorporation 1 Shares issued under IPO 275,000,000 Closing balance 275,000,001 (b) Movement in Retained Earnings Opening balance 31 December 2017 Profit attributable to members of the company 13,769,795 5. Financial Instruments Measured at Fair Value $ - 13,769,795 AASB 13: Fair Value measurement requires the disclosure of fair value information using a fair value hierarchy reflecting the significance of the inputs in making the measurements. The fair value hierarchy consists of the following levels: Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The following table presents the Company s financial assets and liabilities measured and recognised at fair value as at 31 December 2017. 31 December 2017 Level 1 Level 2 Level 3 Total $ $ $ $ Financial assets (securities owned long) 197,812,542 - - 197,812,542 Financial liabilities (securities sold short) (56,549,917) - - (56,549,917) Total 141,262,625 141,262,625 10
6. Earnings Per Share 31 December 2017 $ Profit after income tax used in the calculation of basic and diluted earnings per share 13,769,795 Basic and diluted earnings per share 10.6 cents Weighted average number of ordinary shares outstanding during the period used in calculating basic and diluted earnings per share Number of Shares 129,490,292 The weighted average number of shares used as the denominator in calculating basic earnings per share is based on the average number of shares from 9 June 2017, being the date of incorporation, to 31 December 2017. The basic earnings per share would be 5.0 cents per share if calculated from 25 September 2017, being the allotment date, as the Company only had one share on issue and no earnings up to this date. 7. Subsequent Events There has not been any matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the reporting period, that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. 8. Capital Commitments and Contingent Liabilities There are no contingent liabilities or contingent assets at 31 December 2017. 11
Directors Declaration In accordance with a resolution of the Directors of, the Directors of the Company declare that: 1. The financial statements and notes, as set out on pages 5 to 11, are in accordance with the Corporations Act 2001, including: (a) complying with Accounting Standard AASB 134 Interim Financial Reporting, the Corporations Regulations 2001 and any other mandatory professional reporting requirements; and (b) giving a true and fair view of the Company s financial position as at 31 December 2017 and of its performance for the period ended on that date. 2. In the Directors opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Board of Directors. David Jones Chairman Sydney 29 January 2018 12
Independent Auditor s Review Report To The Members of Report on the Interim Financial Report We have reviewed the accompanying interim financial report of VGI Partners Global Investments Limited ( the company ), which comprises the statement of financial position as at 31 December 2017, statement of comprehensive income, statement of changes in equity and statement of cash flows for the period ended on that date, a summary of significant accounting policies, other selected explanatory notes and the directors declaration of the company. Directors Responsibility for the Interim Financial Report The directors of the company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the interim financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410: Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial report is not in accordance with the Corporation Act 2001 including: giving a true and fair view of the Company s financial position as at 31 December 2017 and its performance for the period ended on that date; and complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of VGI Partners Global Investments Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of the interim financial report consists of making enquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. An independent New South Wales Partnership. ABN 17 795 780 962. Level 22 MLC Centre, 19 Martin Place, Sydney NSW 2000 Liability limited by a scheme approved under Professional Standards Legislation 13 Pitcher Partners is an association of independent firms Melbourne Sydney Perth Adelaide Brisbane Newcastle An independent member of Baker Tilly International
Independent Auditor s Review Report To The Members of Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of is not in accordance with the Corporations Act 2001, including: (i) (ii) giving a true and fair view of the company s financial position as at 31 December 2017 and of its performance for the period ended on that date; and complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporations Regulations 2001. SCOTT WHIDDETT Partner PITCHER PARTNERS Sydney 29 January 2018 14